The Society for Standards Professionals

Using ANSI Human Resource Standards to Create Business Advantage in the Workplace

Lee Webster, JD MBA SPHR GPHR Director HR Standards, SHRM

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Road Map for Today’s Discussion

• A Short History

• Define the problem (both domestically and internationally)

• Offer a standard definition for a ‘standard’

• The Standards

• What this Standard Can Do For You

• The ‘Call for Action’ -- How you can get involved, and

• Next Steps and Adjourn

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Who Am I?

• Lee Webster – Director, HR Standards, SHRM

– Chair, ISO TC 260 Human Resource Management

– Chair, ANSI Organizational Members Forum

– 20+ years of experience in HR, including Exxon, PepsiAmericas, J.I. Case Corporation, US Army

– BS USMA JD/MBA Northwestern University SPHR/GPHR

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SHORT HISTORY

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Modern Human Performance Measurement

• Frederick Taylor (March 20, 1856 – March 21, 1915)

• An American mechanical engineer who sought to improve industrial efficiency.

• He is regarded as the father of scientific management and was one of the first management consultants.

• Taylor was one of the intellectual leaders of the Efficiency Movement and his ideas, broadly conceived, were highly influential in the Progressive Era.

• Management theorist Henry Mintzberg strongly criticized Taylor’s methods stating that an obsession with efficiency allows measureable benefits to overshadow less quantifiable social benefits completely, and social values get left behind.

Modern History

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Contemporary Leaders in Performance Measurement

PwC Saratoga

Whether it Be Individuals

Or Organizations

All confront the same

problem . . .

Contemporary Times

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DEFINE THE PROBLEM

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Do Any Of These Sound Familiar?

• HR doesn’t understand the business!

• HR is not strategic enough!

• HR does not understand or have the HR analytics!

• HR is always reinventing the wheel!

• HR is not a rigorous or disciplined area of work!

• With respect to employee performance measurement:

– Can we measure it at all?

– What is relevant to measure?

– How do we compare and analyze this data?

– What business decisions can we make based upon this information?

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The BI industry as a whole has grown (software only)

Companies realizing HR BI is a competitive advantage

Companies wanting to link HCM analytics to company bottom line

Where HR Executives rank the importance of HR Analytics

Recent IDC survey of HR Executives ranking HR Analytics as most important on a scale of 1 to 5.

$B

The Demand for Comparable Organizational Performance Metric Grows

Source: 2010 Knowledge Infusion & HR Executive Talent Management Survey

82

%

HCM is still in its infancy

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August 2010, IDC

The work environment is changing. HR and line managers need a way to evaluate contingent, temporary, freelance and home based workers

Comparing highly divergent workers creates a need for systems which provide unbiased, traceable and repeatable analytics.

The Changing Workforce is Fueling the Need for Better BI Content

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Measures and Metrics Remain the Premiere Concern of Business

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Human Capital Decisions with Workforce Analytics

Getting Smart About Your Workforce: Why Analytics Matter. © IBM 2009

A small number of organizations make human capital decisions based on analytics

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Barriers to Successful Use of Workforce Analytics

Getting Smart About Your Workforce: Why Analytics Matter. © IBM 2009

Where standards can help.

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No Size Fits Anybody

• Its not just having organizational goals

• Its not just having individual and organizational plans

• It not just assessing their individual and organizational performance

• Its not just capturing data

• It is about linking all of these elements into a coherent system

AND

• It is about having robust, interoperable, and comparable approach to assess organizational performance longitudinally and across sectors.

• The problem is that everyone has done captures performance metrics so differently that there has been no way to develop a coherent wisdom about human and organizational performance.

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So, if a great deal of corporate spending is around HCM how do I measure HCM effectiveness?

It’s a snake It’s a fan

It’s a tree

Some measure from: A. Measure from date of “slot” creation. B. Measure from date of posting. C. Measure from date of first application

received.

Some measure to: A. Date candidate accepts offer. B. 1st Day of work. C. Date Candidate approved manager. D. Date of test completion.

Comparing

HCM at two

corporations

is difficult.

DAYS TO HIRE CALCULATION

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Global Interest in HR Standards is High

• According to a 2008 survey of 4,700 executives conducted by the Boston Consulting Group (“BCG”) and the World Federation of Personnel Management Associations (“WFPMA”), global organizations need to master their HR processes and while delivering on recruiting and staffing commitments to meet future challenges. Boston Consulting Group and the World Federation of

Personnel Management Associations. Creating People Advantage: How to Address HR Challenges Worldwide Through 2015. Boston: BCG and WFPMA, 2008

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HR Management Is Increasingly Complex

• Talent management continues to be a high priority and must be more efficient than before while leveraging cost awareness and monitoring demands for key positions.

• Finding and retaining quality talent continues to be essential to business sustainability, but is difficult in global markets that may act differently in turns of opportunity and salary treatment.

• A new approach is needed to develop global workforce cultures, with better understanding of transnational teams, online collaboration, globalization and business process transformation.

• Global mobility of high-value workers continues as multinational companies restrict new hires and relocate talented employees from within their existing workforce.

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SHRM Global Special Expertise Panel. Future Insights: The Top Trends According to SHRM’s HR

Subject Matter Expert Panels. Alexandria: The Society for Human Resource Management, 2009.

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• SHRM initially decided to pursue standards development because:

– It reinforced our strategic goal to Advance the Profession

– Anecdotal feedback from members indicated a need for more structure in how HR got done and consistency across organizations

– Standards would support the Foundation, Academic Initiatives, Knowledge Advisory, Certification, and Research activities that SHRM performs

– We saw other organizations, like the British Investors In People, pursuing standards development in the UK

Setting the Stage: Why is SHRM Doing This?

Why is SHRM involved?

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Sanliu de qiye zuo chanpin; erliu de qiye zuo jishu; yiliu de qiye zuo biaozhun.

“Third Class companies make products;

Second class companies develop technology;

First class companies set standard.”

A contemporary Chinese saying quoted in the publication China’s Post-WTO Technology Policy: Standards, Software

And the Changing Nature of Techno-Nationalism

“Patents, Human Resource and Standardization are

the strategic tool for national development in China.”

——Ministry of Science and Technology, 2002

China and Standards

The Chinese View

So What Must Be Done?

• HR does not understand business

• Global interest is high

• HR is increasingly complex

• Global consumers want ethically made products

• Talent growth will be in emerging economies

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If the challenge to the HR profession is . . .

Then the response must be to. . .

• Add professionalism and rigor to HR delivery

• Provide certainty

• Eliminate redundancy and cost

• Improve workforce management practices

• Facilitate and expedite global talent transfers

Creating and Applying Performance Based Standards for HR Organizations

are a way to: • Seize the Future of Human Resources • Dispel the myths and correct the truths about HR • Become a member of an defined / professional

group • Define the thresholds of effective organizational

performance • Securing the foundations of professionalism in HR • Ensuring that HR organizations deliver on their

evidence based solutions • Effectively serve the interests of our organizations,

employees, and other stakeholders

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BUT HOW?

• By writing down minimum effective HR practices

• By agreeing across the profession, by consensus that what has been written is at least minimally effective

• By voluntarily following and improving these practices over time

• By using a credible, repeatable, durable process

• Essentially by doing what doctors, lawyers, accountants, teachers, plumbers, dentists, other professions have been doing for thousands of years!

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But we don’t want to wait centuries for this to happen!

Survival is a Great Motivator

If 40 -60% of the value

of an enterprise is its

human capital, if we

did not start this,

someone else would.

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What does Brad Pitt Have to Do with Metric Standards?

Moneyball

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• Permits “apple to apple” metrics comparisons

• Achieves consistency and identifies “preferred employers”

• Improves HR organizational and individual talent assessment

• Reduces the cost of HR operations

• Improves the use of HR resources

• Provides some legal protection for conforming users

• Further confirms HR as a profession Standards will put the “capital” in human capital management

Supporting Evidence: Quick Gains from Standards

SO WHAT’S A HR STANDARD?

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Professional

Ethical

Minimally Effective

Workforce Practices

and Metrics

HR Standards Taxonomy

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Developing

standards

also means

that we

must also

take some

risks

Are We Risk Takers?

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Accountable

Essential

Unique

Irreducible

Exclusive

How Standards Will Differentiate the Profession

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Standards are not a best practice. They are actually, more of a

minimum practice. What is the least one has to do to be

considered part of the standard.

Standards are not created by “Law”. Standards are voluntary.

Even so, many “standards” are later turned into laws because

society believes the standards is so important. An example, is

“fire retardant standards” for child clothing which evolved into

“law.”

Standards are not created by “Contracts”. There is no penalty

for violating a standard. A standard is not an “agreement”

between two parties.

Setting the Stage: What is and is not Standards Development

Standards in Brief

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This is the easiest solution for the HR profession. SHRM has chosen to take a different path.

One Approach

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The goal of SHRM is the development of HR Standards to

1)Establish the science or

technology of HR

2)To train practitioners in the art of using the standards

Advocating the Science and Art of HR

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Core Membership

Standards provide consistent and reliable solutions for our members.

From them tools and forms can be created.

Global

Leadership of the US Technical Advisory Group (US TAG) and the ISO

TC 260 for HR Management reinforces the global reach and influence of

SHRM.

Thought Leadership

The act of sponsoring HR standards is itself thought leadership. We

also expect academics and consultant to expand this thinking as

standards grow in use.

Linked to SHRM’s Mission

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APPROACH AND TIMELINES

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Current Status of American National HR Standards Staffing &

Workforce Planning Taskforce

Cost Per Hire

Workforce Planning

Job Descriptions

Metrics & Measures Planning Taskforce

TBD

HR Metrics & Reporting

Turnover Definition

Performance Management

Taskforce

Performance Management

Diversity & Inclusion Taskforce

Top Diversity Professional

Diversity & Inclusion Programs

Diversity Metrics

Compliance & Regulatory Taskforce

TBD

Employee & Labor

Relations Taskforce

Employee Engagement

TBD

TBD

Start-up of the workgroup creating the standard

Standard in drafting phase Standard in public review

phase Standard in ANSI approval

phase Publication of the standard

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Developing and Published Domestic HR Standards?

• Structure of the current standard setting process

Today there are several standards taskforces in each of the 3 areas; 2 standards have been

published and 7 standards projects are actively under development. All taskforces are

accepting participants

American National HR Standards

Taskforces and Projects

Metrics & Measures

HR Metrics & Reporting

Turnover Definition

Staffing & Workforce Planning

Cost-per-Hire

Workforce Planning

Job Descriptions

Performance Management

Diversity & Inclusion

Top Diversity Professional

D&I Metrics

D&I Programs

Bold and italics indicate published standards.

Joint SDO Projects

Workplace Violence

(ASIS)

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A Sample List of Organizations Involved in HR Standards Development

• Intel Corporation

• U.S. Equal Employment Opportunity Commission

• Pacific Northwest National

• Alberto Culver

• American Staffing Association

• Port Authority of NY & NJ

• Leviton Manufacturing Co.

• Trane, a wholly owned subsidiary of Ingersoll Rand

• General Dynamics

• Microsoft China R&D

• Shell Oil Company

• Hodes iQ (Bernard Hodes Group)

• University of Central Florida

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• Royal Caribbean Cruise Line

• Mitsubishi Electric Power Products, Inc.

• ADP

• Hospital Humana, Inc.

• Mercer

• Hewitt Associates

• Chevron Corporation

• McGuireWoods LLP

• British Telecom

• SAIC

• Kaiser Permanente

• Jackson Lewis LLP

• ConocoPhillips

• Time Warner Cable

Standards Development Principles

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E

Q

U

A

L

F

O

O

T

I

N

G

M

A

R

K

E

T

D

R

I

V

E

N

C

O

N

S

E

N

S

U

S

V

O

L

U

N

T

A

R

Y

PILLARS of

STANDARDIZATION

N

A

T

I

O

N

W

I

D

E

* *Global if ISO

SHRM Now Oversees All Levels of HR Standards Development

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SHRM is the player at all levels

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Signifies that

the

standards…

– Will be developed using fair, open process that ensures a level playing field

– Will meet the needs of materially affected interests

– Will be voluntary – compliance is not required unless adopted by regulation or statute

This is a public document if you want a copy.

Process Check: How the Work Must Be Done

Process Check: Areas of Inquiry

• T.1 Definitions (DEF)

• T.2 Metrics and Measures (MAM)

• T.3 Compliance and Regulatory (CAR)

• T.4 Compensation and Benefits (CAB)

• T.5 Employee and Labor Relations (ELR)

• T.6 Staffing and Workforce Planning (SWP)

• T.7 Organizational Development and Change Management (ODC)

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• T.8 Mergers, Acquisitions and Outsourcing (MAO)

• T.9 Performance Management (PER)

• T.10 Diversity and Inclusion (DAI)

• T.11 Sustainability and Workforce Readiness (SWR)

• T.12 Training and Employee Development (TED)

• T.13 International (INT) US TAG

Red connotes active taskforces

Project Initiation

Development of a Draft American National Standard

Consensus Ballot (formal ballot of consensus

voting body)

Vote and Comment Resolution (recirculation and 2nd public review if necessary)

Consensus Obtained (submit to the ANSI Board of Standards Review)

Approval by ANSI Board of Standards Review

Public Review Period (45 day Announcement in

ANSI Standards Action)

IDEAS

VOTE COMMENTS

Process Check: From the Tree Tops

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Process Check: At the Roots

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Process Checks: The Previous Process Expanded

1 2 3 4 5 6 16 17 18 19 20 21

SHRM Submits ANSI PINS (Announcement of work)

Hold Taskforce and Workgoup Mtgs

ANSI Public Review Period – 45 days

Vote and Comment Resolution (Recirculation and 2nd ANSI Public Review, if necessary)

Consensus Obtained (Submit to ANSI for Approval)

Taskforce Letter Ballot – 30 days

ANSI Approved Publish

Standards Project & Leader Picked

Develop Taskforce Roster (Voting & Observer) Workgroup Assigned Hold Kickoff Taskforce Meeting Workgroup Develops Draft Standard

Timeline extended should any letter ballot and public review comments result in substantive changes to the draft standard and also factoring

additional taskforce and workgroup meetings. Appeals Process in place if applicable. Reference SHRM Procedures for the Development of

American National Standards (PDANS).

Phase 1

Phase 2

Phase 8

Phase 7

Phase 6

Phase 5

Phase 4

Phase 3

Phase 9

Process Check: Domestic Standards Development Timeline (est.)

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The First of Many

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HOW DO I USE THESE HR STANDARDS?

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Making it Real

• Andrew Gadomski of Aspen Advisors

• Has operationalized the standard

• Placing the requirements into a fillable PDF

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The Standard Result

• Example 2

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The Latest Version

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Other Ways to Operationalize the Standard

• Benchmark your CPH data with local firms to determine a community or sector or department/division pricing models for talent

• Use the CPH in your preparation for collective bargaining agreement

• Require recruiting or staffing firms to submit bids or RFP based on the CPH standard’s algorithm

• Build your budgets based on inputting historical data into the CPH approach, adjusted for inflation

• Conduct a seminar with your workforce leaders on CPH and its influence on hiring decision

• Use CPH results as a way to leverage job posting costs with newspapers and online services

• Establish a Recruitment Efficiency Index based on the standard

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OPPORTUNITIES AND CHALLENGES

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Opportunity: Global Growth

• February 2011: Establish ISO TC 260 for HRM

• March 2011: Establish a US TAG

• November 2011: Convened first TC meeting (US)

• September 2012: Convened second TC meeting (Australia)

• September 2013: Convene third TC meeting (the Netherlands)

• 2014/2015: Completion of the first ISO TC HRM standard(s) anticipated

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Implications: Opportunities

• Once a number of domestic standards are done, SHRM can establish an Accreditation methodology for organizations that wish to be identified as compliant to the standards.

• ISO is eager to establish a management system for HR management standards. They have begun considering numbers, like ISO15000, for this system of global standards.

• ANSI and ISO strongly supports of this effort.

• As more international organizations and governments learn about this standard, they are interested in getting involved.

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Implications: Challenges and Risks

• The HR community fails to appreciate the magnitude of this achievement and build on the opportunity

• Existing standards developing bodies (ILO) continue to challenge the legitimacy of these standards

• Peer global associations have registered concern about SHRM or US hegemony in the area of HR standards

• Some business leaders are concerned that standards will restrict their freedom to operate in the marketplace

• Consumers and employees may become concerned that standards will further dehumanize the workplace and cause worker exploitation

• HR professionals are concerned that these standards will make them more accountable

• Legal challenges – although not required, legal compliance offers some protection

• After building it (them), will they come? 55

Advantages to the Business Community

• Building on previously standardized HR practices, metrics, systems, and terminologies lowers talent acquisition and transfer costs

• Standardization lowers costs by eliminating redundant practices, minimizing errors, and reducing time to hire and develop workers

• Standards and conformance foster innovation in the labor market, shortening the cycle between the need to hire and a productive worker

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Advantages to the CHRO

• CHROs can objectively and accurately measures the value of function to the success of the firm

• CHROs will now have an method to measure and assesses the effectiveness of temporary, freelance, or outsource labor

• Minimum effective standards will allow CHROs to focus limited resources on key strategic initiatives and otherwise be simply effective

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Advantages to Membership

• Reliance on standards and conformance ensures talent acquisition and development quality and reliability, all of which provides cost savings and a better return on investment

• Standards confirm the idea that HR is a unique, exclusive, and essential profession

• Membership will receive new solutions, tools, and networks to help them contribute to organizational success

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CALL TO ACTION

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Next Steps and Other Issues

• Expand domestic standards work to other subject areas

• Establish and grow global standards efforts

• Based on market need, establish a conformity assessment (accreditation) solution

• Build awareness and enthusiasm about HR standards

• Prove business and professional value

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So what do we need. . . ?

• We need participants and other resources to expand the work

• We need stakeholders to review public review documents

• We need organizations to use these standards

• We need advocates

• We need you!

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How Do I Participate?

• Visit the SHRM Standards Website to learn what participation opportunities are available – http://www.shrm.org/hrstandards/Pages/default.aspx

• Encourage your organizational leadership to join the US TAG and/or to sponsor domestic activities

• Comment on public review versions of draft standards (available on the Standards Website)

• Use the standards and provide feedback on their effectiveness

• Advocate and Engage

• Obtain current published standards here:

http://www.shrm.org/HRStandards/PublishedStandards/Pages/default.aspx

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IN SUMMARY

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– Standards have been around since the beginning of time. HR has had a shadow role in the development of standards.

– The HR profession needs standards to fully implement its professional role like other learned professions.

– HR professionals can add material value to their organization and focus their resources on truly growth oriented organizational activities.

– Using credible standards development processes required by both ANSI and ISO.

– Several international organizations and governments are attracted to HR/Labor standards.

– Organizations are actively pursuing a leadership role in the development of standards

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Summary

Summary

SHRM Standards Website

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Follow us on Facebook

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And on Twitter

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Where We’ve Been

• Defined the problem (both domestically and internationally)

• Offered a standard definition for a ‘standard’

• Described the typical process and timeline for developing a standard

• Discussed the operational benefits of the CPH standard

• Showed the opportunities and the risks for establishing global standards, and,

• Made the ‘Call for Action’ -- How you can get involved

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So Finally, A Metaphor to Explain Where Were

Going

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Standards are like isolated

specks of paint on a canvas.

Alone, they say very little.

But working together, using a credible process . . .

But together they paint the picture of a profession!

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Questions

Questions?

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THANK YOU.

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